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Smith v. HSBC Mortgage Services, Inc.

Court of Appeals of Tennessee, Jackson

May 17, 2018

MARGARET SMITH
v.
HSBC MORTGAGE SERVICES, INC., ET AL.

          Session April 17, 2018

          Appeal from the Chancery Court for Shelby County No. CH-13-0580-2 Jim Kyle, Chancellor

         This appeal arises out of protracted litigation following a foreclosure sale. The plaintiff asserted claims against the mortgage holder and the purchaser at the foreclosure sale for breach of contract, breach of the implied duty of good faith and fair dealing, improper foreclosure, and fraud. The trial court dismissed each of the claims, and the plaintiff appeals. Due to the deficiencies in the plaintiff's brief on appeal, we conclude that she has waived consideration of any issues and hereby dismiss the appeal.

         Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed.

          Margaret L. Smith, Memphis, Tennessee, Pro se.

          Darrell West, Nashville, Tennessee, for the appellee, HSBC Mortgage Services, Inc.

          Bruce Lee Feldbaum and Mark Cantora, Memphis, Tennessee, for the appellee, Gregory Griffin.

          Brandon O. Gibson, J., delivered the opinion of the court, in which J. Steven Stafford, P.J., W.S., and W. Neal McBrayer, J., joined.

          MEMORANDUM OPINION

          BRANDON O. GIBSON, JUDGE.

         [1]I. Facts & Procedural History

         Plaintiff Margaret Smith filed this lawsuit in chancery court on April 18, 2013. According to Plaintiff's complaint, she purchased a home from her mother with an existing mortgage in 2005. Plaintiff made payments on the mortgage but admittedly experienced financial difficulties and got behind on the mortgage payments. According to the complaint, she negotiated with the mortgage company, HSBC Mortgage Services, and was "advised" in late February 2013 that if she made a payment of about $3, 200, the loan would be "reinstated" and foreclosure activities would cease. Plaintiff alleged that she made the payment based on these representations, but HSBC continued with the foreclosure proceeding anyway and sold the property at a foreclosure sale on March 7, 2013. Plaintiff's complaint asserted claims against HSBC and the purchaser at the foreclosure sale, Gregory Griffin, for breach of contract, breach of the duty of good faith and fair dealing, fraudulent misrepresentation, and improper foreclosure. The complaint also stated that Griffin had filed a forcible entry and detainer ("FED") action in general sessions court to have Plaintiff removed from the property. Plaintiff asked the chancery court to enjoin the defendants from proceeding with the pending FED action in general sessions court and from attempting to remove her from the property until this case could be heard on its merits. She sought compensatory and punitive damages.

         Griffin filed an answer, a counter-claim against Plaintiff, and a cross-claim against HSBC. HSBC filed an answer. The chancery court entered a preliminary injunction, but it was later dissolved. HSBC filed a motion to dismiss for failure to state a claim. After a hearing, the chancery court entered two orders dismissing all of Plaintiff's claims against HSBC. Plaintiff's claims for breach of contract and breach of the duty of good faith and fair dealing were dismissed with prejudice on the basis that Plaintiff's mother entered into the mortgage loan with HSBC, and although Plaintiff had received an interest in the property via quitclaim deed, Plaintiff was never a party to the mortgage or in privity of contract with HSBC. The chancery court entered a second order dismissing the claims for improper foreclosure and/or fraud without prejudice. This order referenced the status of the pending FED action in which Griffin sought to evict Plaintiff from the premises. The general sessions court had ruled in favor of Griffin, and Plaintiff had appealed to circuit court for a trial de novo. According to the second order entered by the chancery court, Plaintiff's attorney informed the chancery court that Plaintiff had filed a third party complaint against HSBC in the pending circuit court appeal. As a result, the chancery court deemed it appropriate to dismiss Plaintiff's claims for improper foreclosure and fraud without prejudice "inasmuch as they are now at issue in the prior suit pending in the Circuit Court."

         Although these two orders resolved the claims asserted by Plaintiff against HSBC, they did not resolve the counter-claim and cross-claim asserted by Griffin or Plaintiff's claims against Griffin. Nevertheless, Plaintiff filed a notice of appeal to this Court seeking to challenge the two orders entered in chancery court. On July 7, 2015, this Court dismissed Plaintiff's appeal of the chancery court action due to the lack of a final judgment. Smith v. HSBC Mortg. Servs., Inc., No. W2014-01070-COA-R3-CV, 2015 WL 4087158, at *1 (Tenn. Ct. App. July 7, 2015). While the appeal was pending, however, the circuit court had also entered an order dismissing (for failure to state a claim) the identical claims asserted by Plaintiff in circuit court in her third party complaint against HSBC. The circuit court's order noted that Plaintiff had filed a separate action in chancery court and that her third party complaint in the circuit court case "asserts claims against HSBC that are identical to the claims asserted in her previously filed Chancery Court lawsuit." However, the circuit court's order also noted that HSBC was not seeking dismissal in circuit court on the basis of res judicata because the chancery court proceeding was not final for purposes of res judicata. Considering the merits of Plaintiff's claims, the circuit court dismissed them for failure to state a claim. The claims for breach of contract and breach of the duty of good faith and fair dealing were deemed barred by the statute of frauds because Plaintiff was seeking to enforce an alleged oral modification of the mortgage agreement regarding the $3, 200 payment. The claim for fraudulent misrepresentation, for which she sought to set aside the foreclosure sale, was dismissed based on the circuit court's determination that Plaintiff could not establish a misrepresentation regarding a past or existing fact or knowledge of its falsity. After resolution of the remaining claims in the FED action, Plaintiff filed a second notice of appeal, seeking review of the circuit court's order in this Court. Due to numerous deficiencies in Plaintiff's pro se brief on appeal, we dismissed the appeal for failure to comply with the rules of this Court without reaching the merits of the issues. Griffin v. Smith, No. W2015-00334-COA-R3-CV, 2016 WL 721045 (Tenn. Ct. App. Feb. 23, 2016).

         Meanwhile, back in chancery court, a hearing was held after the dismissal of the first appeal from chancery court (for lack of a final judgment) in order to address the still unresolved counter-claim and cross-claim and Plaintiff's claims against Griffin. Although we do not have a transcript of the hearing, the trial court's written order states that Plaintiff sought the entry of a final judgment so that she could re-file her appeal to this Court to challenge the chancery court's dismissal of her claims in the two orders entered in 2014. The chancery court noted that the claims asserted by Plaintiff in chancery court were "substantively identical" to those asserted in her third party complaint in circuit court and that the circuit court had likewise dismissed all of the claims on a motion to dismiss. Like the circuit court, however, the chancery court did not make any finding or ruling regarding res judicata, noting that (at the time of the hearing) the circuit court's dismissal was still on appeal to this Court. According to the chancery court's order, Plaintiff still wanted to pursue an appeal to this Court of the chancery court rulings and stated that she had "no objection to the Court's dismissal of the foregoing

          Unresolved Claims" that were not addressed by the two 2014 chancery court orders: the counter-claim and cross-claim asserted by Griffin, and Plaintiff's claims asserted against Griffin in her original complaint. As a result, the chancery court dismissed the previously unresolved claims and purportedly entered a final judgment. Plaintiff filed yet another notice of appeal. This Court dismissed the appeal without prejudice for failure to comply with Tennessee Rule of Civil Procedure 58. After the chancery court entered an order containing a certificate of service, Plaintiff filed another notice of appeal to this Court.

         II. ...


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